The number of pensioners who have been forced into insolvency has soared in the last five years, new figures showed today.
According to the accountancy firm Wilkins Kennedy, around 7% of all those who have filed for bankruptcy or taken out an individual voluntary arrangement (IVA) in the past year were retired - a total of 7,900 people. This compares with a figure of just 3% for all 2002 - some 900 pensioners.

The figures reflect the rising number of insolvencies in Britain - from 30,587 who became bankrupt or took out an IVA in 2002 to 113,445 during the year to the end of June 2007.
The firm said rises in fuel and food prices were taking their toll on pensioners' finances. It warned the trend was likely to continue as increased life expectancy meant pensioners' limited savings were put under further strain.

The group said the financial difficulties were added to by the government's complicated tax system and pension credits system that left many old people unaware of the benefits they were entitled to.

Keith Stevens, insolvency partner at Wilkins Kennedy, said: "Although attitudes towards bankruptcy have changed dramatically since the days of debtors' prisons the older generation still feel the stigma of bankruptcy and are reluctant to ask for help until it's too late.

"At the same time they are often unused to being offered high level of credit and may take on unmanageable levels of debt without considering how they will make repayments when their income falls back on retirement."

He said pensioners who went bankrupt were usually not homeowners and had few assets to fall back on when they reached retirement. He added that there was a higher than expected concentration of bankruptcies in rural areas.

Recent research showed one in five retired homeowners - a total of 1.1 million people - were still paying off a mortgage as they entered retirement.

Separate research from the charity Age Concern revealed that more than 50% of pensioners are not receiving all the benefits available to them, meaning an estimated £4.2bn worth of benefits is left unclaimed each year.

Mark Neal, managing director of property specialists Homewise, said the bankruptcy figures reflected the rising financial crisis affecting Britain's pensioners.

Mr Neal, whose firm provides lifetime leases for pensioners who want to sell their homes to release capital, said: "It used to be the case that many of our customers were trying to free up capital to fund their leisure time during their retirement.

"Now almost all the pensioners we deal with are selling their homes to service debt."

Shadow work and pensions secretary Chris Grayling called the bankruptcy figures "profoundly depressing" and blamed the recent pension crisis and stealth taxes introduced by Gordon Brown for "making life immensely difficult for many retired people".

A government spokesman defended Labour's record saying average pensioner net incomes had been rising faster than earnings.

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